Seven Top Tips To Prepare For PAYE Modernisation

With PAYE modernisation fast approaching, it’s important that all businesses and employers be prepared for the incoming changes about to befall the system.

In March 2019, employees will be able to access all their pay and tax data via the Revenue office’s enhanced ‘myAccount’ online portal in the form of a statutory statement summarising the contents of each payslip throughout the tax year. The new service will rely on employers to supply up-to-date and accurate information to Revenue under the new reporting obligations.

According to the Revenue office, PAYE modernisation will improve the streamlining of current business processes and reduce the administrative burden currently experienced by employers to meet their PAYE reporting obligations. The changes will come into place from January 1st 2019.

To make sure that you’re prepared for the impending deadline, here are some essential tips from Sean Murray, Software Readiness Lead at leading HR services provider NGA, and President of the Irish Payroll Software Association.

1. Cleanse Your Data

Do you have any gaps in the required information for any of your employees? It’s not unusual for employers to have a few blank spaces on their employee records. Information such as addresses, tax cert information, start and leave dates can often be out of date too. It’s well worth reviewing your business processes and controls to ensure you are up-to-date and can maintain accurate data going forward.

2. Register PPS Numbers

Are all your contracted employees registered with the Department of Employment Affairs and Social Protection? Having PPS numbers in place will be vital if Revenue is going to accurately supply tax certs to individual employees. It can take time for PPS numbers to be allocated, sometimes up to three months if the worker has come from abroad, so you may get some leeway on this – but don’t expect too much.

Have you assigned an Employment ID to each employee? This should be unique for each employee record. Revenue will need you to assign these in order to differentiate between different contracts of employment. This will help avoid confusion if an employee has two separate jobs – for example, if they work as a security guard Monday to Wednesday and as a facilities manager Thursday and Friday. Previously, tax cert details could sometimes be applied to the wrong record and Revenue wants to put a stop to this.

4. Up-To-Date Tax Certs

Downloading and applying the latest tax cert information (P2C file) before every payroll run will be an absolute must. All this information will be available for employees to check via the updated ‘myAccount’ portal. So, it’s vital that changes in circumstances are recorded and the subsequent tax cert changes are properly applied to avoid any queries.

5. Educate your employees

If there is a problem with a tax cert, or if there is a query about a published Revenue statement, you’ll need to ensure employees know who to follow up with, as it may not necessarily be the fault of the employer. Employees will also need to know that they’ll no longer be receiving forms such as P45s and P60s from their employer. Instead they can access all this information from Revenue’s online portal via ‘myAccount’– where they can also review and manage tax by reallocating credits and cut-off values, if they have more than one job.

Come January you’ll need to ensure that all payroll statutory data is submitted to Revenue following each payroll run. This must be carried out before the pay date for that run – otherwise your organisation could be subject to a Revenue audit or further action. This is known as the file “on or before” rule.

7. Further information

Keep your ear to the ground on what Revenue is saying. The PAYE Modernisation Project involves the most significant reform of the PAYE system since its introduction in 1960. The functionality being introduced is pioneering and a huge undertaking from a technological deployment perspective. Test environments, for use by software providers, went live in March so it’s entirely possible that further information and guidance could be provided as lessons are learned. In the meantime, you can always ask NGA for advice as we run our own tests in preparation for the go-live date in January.

Joseph O'Connor

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